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The bench of Justice Asha Menon of Delhi High Court has held that a company, being a juristic person, cannot be said to possess mens rea to send a defamatory notice. Court further observed that a communication issued to protect one's business interests cannot be held to be defamatory.

Court held so in a case where an 'alleged' defamatory communication was issued by the representative of the Company in response to the queries of its vendors and customers regarding the situation of the Company's factory premises. According to the order, the company informed the vendors that the erstwhile CEO had locked the Company out of its factory premises, and in this regard legal action had been initiated against him.

The CEO filed a suit for defamation against the company and its representative who addressed the letter on the ground that the Managing Director, had defamed him in the eyes of the third person being vendors.

The Trial court summoned the company and the representative who addressed the letter to face trial in the matter as it found the letter contained prima facie defamatory content.

The company and its authorized representative then approached the High Court against the order of the trial court asking the former to quash it.

Advocate Nalin Kohli, appearing for the petitioner submitted that unless and until there was an intention to cause harm and the contents of the letter had been made without a valid cause, no offence, even prima facie, would be made out against the petitioners. He argued that as regards the company, it could have no mens rea as required under the Indian Penal Code and the summoning has to be quashed.

He further argued that the letter in question was necessitated on account of the unlawful activities of the CEO himself. He further argued that the CEO being an employee of the company, had not made fair disclosures to it before employment and had also thereafter engaged in activities detrimental to the interests of the company.

It was further argued that a criminal complaint was registered on September 19, 2018, at Expressway Police Station at  Phase-II, Sector 83, Noida, against the CEO and some others, including the landlord of the premises at Noida, from where the company was functioning on the allegation that the CEO, his mother, and the landlord had illegally ousted the company and had taken over its business run from those premises.

It was also argued that the impugned order of the Metropolitan Magistrate, summoning the petitioners, reproduced the highlighted words such as "orchestrated an illegal lock out" and “took over the building and our assets" and “FIR has already been registered" and these were the contents that prevailed upon the trial judge to consider the letter as being per se defamatory.

Kohli argued that the company had to protect its business interests in view of the unlawful actions taken by the respondent and in light of the several criminal and civil litigations pending between the parties, in order to warn the vendors and business associates to be wary of dealing with the CEO whom they have earlier understood to be the employee of the company. Therefore, there was no intent to cause any harm, which was an essential and necessary ingredient of defamation.

The court on hearing his submission allowed the plea and held that the Company being a juristic entity cannot be said to possess mens rea and that the essential to the commission of the offence inasmuch as the words spoken or intended to be read or published etc. must be with the intention to harm or knowing or having reason to believe that the imputation would harm and that the company cannot  posses it.

The High Court further held that the Trial Court had fallen into error in summoning the company for defamation.Court noted that merely because the representative of the company had addressed the letter on the  letter head of the company, it would not make the company liable in the absence of any mens rea that can be ascribed to it.

"A reading of this letter would show that it is being addressed to “our valuable vendor” and is explained to be a response to the queries of “customers and vendors”, who had contacted the petitioners about the situation at their office/factory," Court said.

Court held that in the order of summoning, a part of this letter has been quoted by the judge emphasizing certain words.

Thus Court concluded that “the judicial conscience of this Court is persuaded to quash these criminal proceedings in exercise of the powers vested under Section 482 Cr.P.C., as it is also clear that not only are the petitioners entitled to such relief but it would also save the precious time of the Court.”

Case title: Manikandan B Vs Pavan Gaur